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Economics Highlights China and Iran's Complex Relationship

(Washington, D.C.--November 20, 2006) China's long and multi-faceted relationship with Iran has brought mixed results for both nations, according to an expert on the region. John Calabrese, Scholar in Residence with the Middle East Institute told the audience at a recent briefing sponsored by RFE/RL and Radio Free Asia that, while relations are complex, China's growth as an economic power has encouraged Iran to seek a closer alliance.

Calabrese, who is also an Assistant Professor at American University, said China-Iran relations need to be considered within the broader context of China's economic and other interactions with the Middle East. Calabrese said both nations regard themselves as great civilizations victimized by the outside world and determined to play an international role commensurate with their status. Good relations exist between the two countries, Calabrese said, adding that China recognizes and advocates for Iran as a major international power.

Calabrese asserted that China and Iran complement each other economically as well, sharing a mutually advantageous supply-demand relationship based on China's need for--and Iran's abundant supplies of--energy resources. This is a "long-term and irreversible relationship," said Calabrese, with Chinese state energy companies "looking to secure assets for the long-term" while Iran is "hungry for outside investment and technology." Calabrese noted that the Iranian regime is using energy "as a political tool--as a lure to get allies."

Despite the compatibility of interests between China and Iran, the "overlapping strategic outlook" of these two countries "is not identical," said Calabrese. Iranian domestic political constraints, which include suspicion of foreign direct investment (FDI) and accusations that China is "dumping products in Iran," are "sore points" in the relationship. And, China's "most important" bilateral relationship remains its trade with the United States, while Iran has "no relationship with the U.S." Calabrese noted. If Iran's nuclear ambition is a "military" one, Calabrese said, the Chinese will view this as a "threat to the neighborhood," and a destabilizing geo-political factor.

Archived audio of this briefing can be heard in RealAudio and Windows Media formats.